Is Tariffs doing more harm than good for the Caribbean region? In what ways is tariff beneficial or harmful? If the tariff is harmful, can the be rectified, and what recommendations would you suggest?
Is Tariffs doing more harm than good for the Caribbean region?
In what ways is tariff beneficial or harmful?
If the tariff is harmful, can the be rectified, and what recommendations would you suggest?
Solution
A long-term challenge for the global economy is the possibility that some countries compete for export markets with artificially low prices. Political leaders and pundits sometimes propose import tariffs to offset perceived price advantages and press for policy changes abroad. Advocates often fail to realize that such tariff policies, while certainly damaging to their goals, can also be very costly at home. And surprisingly, the damage you do to yourself can be significant, even if trading partners don't respond with tariffs of their own.
When the going gets tough
The World Trade Organization Agreement on Subsidies and Countervailing Measures allows a country to unilaterally apply a countervailing duty on imports of goods whose production has been subsidized. Other policies that clearly do not fall under the strict WTO definition of a subsidy, including currency undervaluation and accompanying macroeconomic distortions, could also have the net effect of pushing down export prices, making trading partners cry foul.
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